LOS ANGELES, CALIF. — Delta Entertainment Corporation, an international independent music and video company, and licensing agent The Harry Fox Agency (HFA) reached a settlement in a two-year royalties payment dispute, says A. Barry Cappello, attorney for Delta. Terms of the confidential settlement were not disclosed. (Delta Entertainment Corporation v. The Harry Fox Agency, CV-01-07376 TJH). Final settlement documents were signed this week.
Delta Entertainment routinely requests permission to reproduce music for its recordings under the Life Music, Reader’s Digest Music, Yamaha, Capriccio, Delta and Legend labels. It pays royalties to musicians through HFA, the music industry’s primary issuer of mechanical licenses for the reproduction of musical compositions. HFA collects royalties from record companies and distributes them to musicians and songwriters.
In 1996, HFA notified Delta that it would be performing an audit of its books for the period July 1, 1991 through June 30, 1997 (later extended to December 31, 1997). The audit took four years to complete. At the conclusion of the audit, HFA claimed Delta owned more than $15 million in unpaid royalties and accumulated interest. Delta conducted its own audit for the same period and countered that it had overpaid HFA $1.182 million. The two sides deadlock and litigation ensued.
“When the case was first filed, it had the appearances of a long, drawn out legal battle,” says Cappello, partner in the Santa Barbara law firm of Cappello & Noël. “The magistrate who presided over the case forced the principals of Delta and HFA to meet until an agreement was reached. They met three times–in Los Angeles, New York and London–and hammered out a solution. This is a great example of how mediation, when in the right hands, can work wonderfully. Delta is delighted with the settlement and continues to do business with The Harry Fox Agency.”
© 2003 Cappello & Noël. All rights reserved.